The broad goal of the research proposed is to understand how ubiquitination and endocytosis regulate particular cell communication pathways during animal development. Using a combination of genetic, molecular and biochemical techniques, a unique mechanism for the regulation of cell communication during animal development will be investigated. A cell signaling pathway essential for patterning the Drosophila compound eye has been identified; the signaling cells require the activity of a deubiquitinating enzyme called Fat facets (Faf). The function of Faf in these cells is to cleave a ubiquitin (Ub) chain from a protein called Liquid facets (Lqf). As the Ub chain targets Lqf for degradation, Faf activity increases the level of Lqf in the signaling cells. Faf is the only example of a deubiquitinating enzyme that removes a Ub chain from a specific protein, a function with respect to ubiquitination similar to that of a phosphatase with respect to phosphorylation. Moreover, Lqf is a Drosophila homolog of epsin, a vertebrate endocytic protein whose function is poorly understood. Thus, an endocytic protein is the target for regulating, via Ub, a cell communication pathway critical to cell determination. First, Drosophila molecular genetics will be used to identify additional components of the essential Faf/Lqf pathway in the Drosophila eye. Second, the substrates of Faf in its other roles in Drosophila development will be identified. Third, portions of Lqf protein required for its interaction with Faf, and for its other functions, will be localized. Fourth, a genetic screen is proposed to investigate the function of Lqf in endocytosis and other potential processes. Finally, a second Drosophila epsin gene, D-epsin2, will be analyzed; the structure and function of D-epsin2 will be investigated. As Faf and Lqf have human homologs, the pathways elucidated here will be universal for animal cells. Moreover, as Ub-mediated protein degradation and endocytosis are important for many cellular functions, several human disease genes, including oncogenes and also genes implicated in Parkinson?s and Alzheimer?s, encode proteins in these two pathways.